JDA - Taxable Year and Sec 54/54f clarification

This query is : Resolved

Quick Summary

Discussion on capital gains tax in a Joint Development Agreement involving inherited property, surrender of flats to a developer, settlement deed between siblings, taxable year, and eligibility for Section 54 exemption. Experts clarified AY 2026-27 applicability and valuation basis.

K HARIHARAN

K HARIHARAN (Querist)
Follow

17 February 2026 Sir / Madam . Requesting your valuable reply

X , Y & Z (brother & sisters) are the joint owners of a house via family inheritance. House purchased in Year 1969 . Land measuring 1200 sq.ft.

Z , Relinquished her share (400 sq.ft. UDS) to X & Y for Rs. 25 lakhs via release deed.

X & Y becomes absolute owner and entered into JDA with a developer. ( JDA agreement in
Rs.100 stamp paper and POA registered in Registrar office in Chennai. Is this fine ? )

As per JDA, 3 Flats to be constructed. 2 flats to X & Y and 1 flat to developer.

POA registered in Nov 2022, assigning 400 sq.ft UDS to developer.

In June 2024, X & Y decided to surrender their share of 1 flat to developer for Rs. 1.4 crore.
Subsequently prepared Supplementary agreement to earlier JDA and POA registered in July 2024 assigning 400 sq.ft. UDS to Developer.

Please note: Flat is under construction till July 2024.

In April 2025, X gave his share in one flat to Y via settlement deed out of love & affection.

In May 2025, Builder handed over the flat to Y.

Developer, Makes payment of 1.40 Crores for the surrendered share to X & Y in 3 phases (May 2025, June 2025, Dec 2025. ) . Developer deducted TDS 1% in FY 2025-26

Could you please advise, how the capital gain tax will have to be arrived at for X & Y ?

Taxable Year 2025-26 (AY 2026-27) ? Whether Sec 54/54F can be applied ?

Flat constructed – Built Up area 840 sq.ft. + UDS 400 sf.ft = Total 1240 sq.ft each flat.
For the flat as per JDA, should we calculate stamp duty value for built up area 840 sq.ft or total 1240 sq.ft as consideration ?

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
Follow

18 February 2026 Tax Year: FY 2025-26 (AY 2026-27) for the final settlement and flat handover.
Section: Use Section 54 (House-to-House).
Consideration: Use the SDV of the total 1240 sq.ft. unit plus the 1.40 Crore cash.
X's Position: X may face a higher tax hit because the "Settlement Deed" to Y is a gift and does not qualify as "reinvesting" for Section 54 exemption for X.

K HARIHARAN

K HARIHARAN (Querist)
Follow

18 February 2026 Thanks for your reply.

X had trfd his share (flat) to Y . So X to pay tax only for the cash he received ? 70 laks ( 50% of 1.40 crore )

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Join the CA Students WhatsApp Community for ICAI Updates, Trending Courses & Notes!

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

ASHOK KUMAR TEKURU

Sidhartha sankar pillai

Pritanu Chakraborty

bhagat ram goyal

GIRISH K SATTI

Subscribe Now

JDA - Taxable Year and Sec 54/54f clarification

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

Senior Executive

Manager- Finance and Compliance

GST CONSULTANT

GST CONSULTANCY

Accountant

CA Final

Article Assistant

Associate CA